Allen Gong

Allen Gong asked about TransMedics' 2026 revenue guidance, specifically how underlying growth in liver and heart, clinical trial enrollment, and the Italy launch factor into the guidance philosophy, given it's a step above street expectations.

Answer

Waleed Hassanein, President and CEO, stated that the guidance seriously considers all outlined opportunities and challenges, aiming for a realistic outlook that bakes in uncertainties. He emphasized that execution and performance will dictate any future revisions to the guidance.

Allen Gong asked about TransMedics' 2026 revenue guidance philosophy, considering the various growth catalysts like liver and heart growth, clinical trial enrollments, and international expansion into Italy, alongside potential challenges.

Answer

President and CEO Waleed Hassanein stated that TransMedics takes guidance seriously, factoring in all outlined opportunities and uncertainties to issue what they believe is a realistic guidance, with execution dictating any future revisions.

Allen Gong asked about the extent of Q3 seasonality observed in July and whether increased regulatory oversight on DCD organ donation could create headwinds for TransMedics.

Answer

CEO Waleed Hassanein noted that while some seasonality is present, it appears slightly less pronounced than last year. He views potential DCD oversight as a net positive that could bring beneficial structure to the system, stating TransMedics is well-positioned to thrive under any regulatory framework.

Allen Gong asked about the primary drivers of the significant outperformance in the liver segment and inquired about business momentum observed in April following the strong first quarter.

Answer

Executive Waleed Hassanein attributed the liver growth to the superior clinical and economic value of the OCS platform across both DBD and DCD organs, stating that upcoming data will unequivocally prove its benefits over competitors. Regarding the guidance, Hassanein confirmed that while they expect full-year momentum to continue, the raised guidance accounts for potential quarterly variability. CFO Gerardo Hernandez added that tailwinds include increased center penetration and organ utilization.

Allen Gong of JPMorgan Chase & Co. inquired about the expected quarter-to-quarter revenue cadence for 2025, particularly regarding potential seasonality, and asked about the anticipated mix of organ-specific growth drivers for the upcoming year.

Answer

CEO Waleed Hassanein explained that while TransMedics does not issue quarterly guidance, variability is normal in the transplant market, often seen in Q3 and Q4 due to holidays. CFO Gerardo Hernandez added that such fluctuations tend to normalize in subsequent quarters. Hassanein confirmed that liver transplants will continue to be the primary growth driver until the new heart and lung clinical programs begin contributing in the second half of 2025.

Allen Gong with J.P. Morgan inquired about the expected contribution of pipeline products like small sizes and reconstruction to the 2026 guidance, specifically asking if reconstruction would be more of a 2027 story and its potential ramp-up speed given the existing hospital footprint. He also sought color on the cadence of operating expenses for 2026, including any front-half weighting and a potential step-up for reconstruction in 2027.

Answer

Raj Denhoy, CFO at Establishment Labs, clarified that reconstruction is likely a 2027 and 2028+ story due to the time required for hospital onboarding, despite strong existing interest. Peter Caldini, Board of Directors, confirmed reconstruction is not factored into 2026 guidance, while Preservé offers significant upside for the current year. Regarding operating expenses, Mr. Denhoy explained that the model shows significant leverage, with incremental investment well below the revenue expansion. He noted that spending would not be linear, with Q1 likely below trend and picking up in the back half of the year, supporting early U.S. expansion.

Allen Gong asked about the contribution of pipeline products like small sizes and reconstruction to the 2026 guidance, specifically how quickly reconstruction can ramp up once approved, and the expected cadence of operating spend (SG&A) throughout 2026, including any front-half weighting or future step-ups for reconstruction.

Answer

Raj Denhoy, CFO, Establishment Labs, clarified that reconstruction is likely a 2027 and beyond story due to the time required for hospital onboarding, including VAC committees and contracts, despite strong existing interest. Peter Caldini, Board of Directors, Establishment Labs, added that reconstruction is not factored into the 2026 guidance, but Preserve offers tremendous upside for 2026. Regarding spending, Mr. Denhoy stated that total operating expenses are projected at $195 million-$200 million, with cash operating expenses around $175 million-$180 million, demonstrating significant leverage as the increase is well below revenue expansion. He noted that spending is not linear, with Q1 likely below trend and picking up in the back half of the year, supporting U.S. expansion early on.

Allen Gong of JPMorgan Chase & Co. asked about the expected cadence of growth for the remainder of the year and sought clarification on the higher SG&A spend and the potential for operating leverage.

Answer

CFO Raj Denhoy projected sequential U.S. growth in Q3 despite seasonality and reiterated the '$40M+ U.S. revenue' guidance as a conservative floor. He explained that higher Q2 SG&A was due to air freight costs and the timing of marketing campaigns. He expects operating expenses to moderate in the second half, creating leverage against rising high-margin U.S. sales and leading to EBITDA positivity.

Allen Gong questioned the conservatism of the Q1 U.S. sales forecast of approximately $5.5 million, given the strong daily order momentum. He also asked about the future trajectory of SG&A expenses following the initial U.S. launch investment.

Answer

Executive Rajbir Denhoy stated that while momentum is strong, it is still early in the launch, justifying a conservative forecast. CEO Juan Jose Quiros clarified that the U.S. commercial infrastructure spend is an ongoing cost, not a one-time expense, and that financial leverage will come from revenue growth over this new, stable expense base.

Allen Gong raised concerns about AI in MedTech, specifically if providers using third-party AI for analysis could impact iRhythm's ability to bill for the analysis portion of the code.

Answer

President and CEO Quentin Blackford emphasized iRhythm's unique position due to its proprietary data, purpose-built hardware for clean ECG data, FDA-cleared algorithms, established CPT codes, CMS coverage, commercial payer contracts, and deep EHR integrations. He highlighted that AI is only as good as the data and requires significant regulatory and workflow integration.

Allen Gong raised concerns about AI's impact on MedTech, specifically if providers using AI for analysis could affect iRhythm's ability to bill CMS for the analysis portion of the code.

Answer

Quentin Blackford, President and CEO, expressed confidence in iRhythm's position, citing its proprietary data, the necessity of FDA clearance for algorithms, established CPT codes, CMS coverage, commercial payer contracts, deep EHR integrations, and a rapidly growing dataset as significant competitive advantages and barriers to entry.

Allen Gong of JPMorgan Chase & Co. inquired about the drivers behind the significant full-year guidance raise, questioning the split between the core business and new innovative partnerships, and the potential for further outperformance.

Answer

President and CEO Quentin Blackford explained that the guidance philosophy remains confident but not overly aggressive. He stated that of the $30 million full-year raise, roughly two-thirds stems from the accelerating core business, fueled by strong commercial execution and large new account onboarding. The remaining third is split between Zio AT strength and contributions from innovative channels like Signify Health and CenterWell.

Allen Gong asked about the confidence behind raising the full-year 2025 guidance in excess of the Q1 beat and the near-term outlook for Japan following the recent reimbursement decision.

Answer

CFO Daniel Wilson explained the guidance raise reflects sustained momentum, particularly from Zio AT, while remaining conservative on newer channels. CEO Quentin Blackford added that the implied growth for the rest of the year is a prudent 15-17%. Regarding Japan, Wilson confirmed the initial $2 million revenue expectation is now lower, which is reflected in the guide. Blackford stated that while the reimbursement rate was disappointing, the company is committed to generating local, head-to-head clinical data to argue for a higher rate in the future.

Allen Gong of JPMorgan Chase & Co. questioned the rationale behind the voluntary delay of the Zio MCT regulatory submission and sought clarity on the company's confidence in its strong Q4 revenue guidance.

Answer

CEO Quentin Blackford explained the Zio MCT delay was a proactive, voluntary decision to bolster the submission by incorporating technician activities, aligning with recent FDA feedback. He also announced the FDA had just cleared the second Zio AT 510(k). CFO Dan Wilson expressed confidence in the Q4 guidance, citing strong business momentum, record new account onboarding in Q3 for both Zio XT and AT, and positive trends to start the quarter.

Allen Gong asked for clarification on the appropriate baseline for iDose TR's sequential growth in Q1, given the unique dynamics of Q4. He also questioned why Epioxa cases wouldn't convert quickly once the J-code is in place, especially with the faster-than-expected O2N installed base and Photrexa's durability.

Answer

Joe Gilliam, President and COO, stated that precise Q1 baseline details are not typically covered on the call but expressed satisfaction with iDose TR's Q1 trending and expected sequential growth. He explained that despite rapid O2N installation, conversion to Epioxa will be gradual due to challenges with miscellaneous codes, elongated pre-approval processes, J-code establishment, and initial technical denials requiring appeals, creating a gap before normalized treatment patterns.

Allen Gong asked for clarification on the appropriate baseline for iDose TR sequential growth in Q1 2026, considering Q4 2025 had some one-time dynamics. He also questioned why Glaukos wouldn't be able to convert Photrexa cases to Epioxa more quickly once the permanent J-code is in place, given the faster-than-expected O2N installed base and excitement for Epioxa.

Answer

Joe Gilliam, President and COO, Glaukos, indicated that providing a precise baseline for iDose TR sequential growth might be too granular for the call, but expressed satisfaction with Q1 trending and confidence in overall guidance. Regarding Epioxa conversion, Mr. Gilliam acknowledged the strong O2N installation progress but explained that challenges with the miscellaneous code in the first half (elongated pre-approval processes) and the initial phase of J-code establishment (payer notifications, technical denials, appeals) will create a gap, leading to a more elongated patient pull-through process before normalized treatment patterns.

Rohin Patel, on behalf of Allen Gong of JPMorgan Chase & Co., asked about the net impact of proposed reimbursement changes, specifically higher facility fees versus lower physician fees. He also questioned the driver behind the significant step-up in SG&A expenses during the quarter and the outlook for 2026.

Answer

President & COO Joe Gilliam characterized the facility fee increase as a 'neutral to slightly positive' event for 2026. SVP & CFO Alex Thurman explained the SG&A increase was driven by a $4 million one-time stock compensation expense, and that underlying OpEx growth was in the mid-teens, consistent with prior guidance. He projected full-year OpEx around $460 million.

Allen Gong asked about Glaukos's potential exposure to a macroeconomic slowdown and its impact on procedure volumes for iStent and iDose, particularly in the back half of the year.

Answer

President and COO Joseph Gilliam acknowledged that macroeconomic uncertainty was a significant factor in the decision to reaffirm, rather than raise, full-year guidance despite the strong Q1. He noted that while glaucoma procedures are less elective, a broad economic downturn could still pressure surgery centers and customer operations, warranting a cautious outlook.

Allen Gong noted the strong performance of the international business and asked about the growth outlook for 2025, considering the end of a favorable tailwind in France, and inquired about potential catalysts in new geographies.

Answer

President and COO Joe Gilliam stated that the 2025 guidance implies high single-digit growth for the international business. He attributed the slowdown from the 20%+ growth in 2024 to three factors: significant foreign exchange headwinds, potential trialing of new competitive products in Japan and France, and the lapping of the favorable French rebate agreement. Gilliam identified the potential MDR approval for iStent Infinite in Europe as a key upside catalyst that is not currently factored into the forecast.

Allen Gong of JPMorgan asked for more detail on the Q4 revenue guide, specifically the contribution from iDose versus iStent, and inquired about the company's confidence in Epioxa's approval and its long-term growth potential for the Corneal Health business.

Answer

President and COO Joseph Gilliam indicated the Q4 guide implies continued iDose expansion, as strong stent growth will face modest headwinds. Chairman and CEO Tom Burns expressed high confidence in Epioxa, noting the FDA agreed the data package is sufficient for submission. He believes Epioxa's non-invasive profile will be a significant growth catalyst for the franchise starting in 2026.

Allen Gong asked about GE HealthCare's assumptions for China's performance in 2026 and potential upside to EPS versus street expectations. He also sought clarification on how the company arrived at its 2026 EPS guidance range and the drivers for potential upside.

Answer

Jay Saccaro (VP and CFO) and Peter Arduini (President and CEO) indicated a cautious approach for China in 2026, anticipating a decline despite some commercial improvements and VBP win rates, influencing the 3-4% total company guidance. For 2026 EPS, Jay Saccaro explained that growth is driven by volume, cost/productivity initiatives, and a neutral-to-positive tariff impact, partially offset by strategic investments in SG&A and R&D.

Allen Gong questioned the cautious Q3 guidance following two strong quarters, asking about July and August trends, and inquired about the disparity between gross system placements and the lower net growth in the installed base.

Answer

CFO Michael Monahan attributed the cautious second-half guidance to three factors: ongoing revenue pressure from the China model switch and lower device ASPs; reduced gross margins from selling more refurbished units and tariff impacts; and planned R&D investments of $4-5 million. Regarding the installed base, he noted that device sales remain pressured by the macro environment and that customer churn was slightly higher in Q2, for which the company is developing a plan to reverse.

Allen Gong questioned the future gross margin profile for Q4 and 2025, noting recent volatility and the shift in product strategy. He also asked for clarification on why a strong Q3 performance led to a weaker full-year guidance revision, questioning what had deteriorated in the company's outlook.

Answer

CFO Michael Monahan projected that Q4 adjusted gross margin would decline sequentially from Q3 due to higher overhead from lower production volumes and an increased mix of lower-margin Elite system sales. He explained the weaker full-year guidance was driven by continued pressure on international device sales, especially in China, which is expected to offset growth in the Americas.

Allen Gong of JPMorgan Chase & Co. requested a breakdown of the 2025 revenue guidance by business segment and geography, and asked about the expected quarterly revenue cadence for the year.

Answer

CFO Mike Bourque explained that Inogen does not guide by revenue channel but expects the B2B business to continue being a major growth driver, though at a slower rate than 2024's 30% growth. He noted the direct-to-consumer (DTC) channel will face challenging year-over-year comparisons in the first half of 2025 due to a smaller sales force, with stabilization expected in the second half. Regarding cadence, Bourque confirmed historical seasonality would likely continue, with Q2 and Q3 being the strongest quarters.